“A Perfect Storm Of Problematic Circumstances”
Newsday reports from New York. “The number of houses on the market on Long Island and in Queens increased last month, the MLS of Long Island said yesterday. According to the MLSLI, 30,313 houses were available on the Island and in Queens in February, about 5,000 more than in January. Real estate experts said they are seeing a significant number of potential buyers, but that the buyers are holding off on purchases to see if prices drop.”
“Pearl Kamer, economist for the Long Island Association, said more homes on the market could spell trouble for the region, particularly if, as anticipated, there are more foreclosures among subprime borrowers.”
“‘If we have significant foreclosures on the subprimes, those are going to be added to the inventory,’ Kamer said. ‘That’s a potential danger.’”
“Edmarie Fletcher, a sales associate in Westbury, said that although plenty of people have stopped in to look, ‘there are very few offers coming in because people want to wait to see if prices drop.’”
“Bay Shore resident Thomas Vitti is getting over the threshold just under the wire: If he and his wife don’t close on their new home in Islip Terrace by the end of the month, they won’t be able to buy it at all.”
“That’s because the crisis in the market for subprime mortgages is changing products and standards so rapidly that the mortgage he’s been offered won’t be available in April. ‘Once we were close to getting our mortgage, a few weeks ago, the market took a dive and I was like, ‘This isn’t good for the mortgage rates’ - and I was right,’ Vitti said.”
“Realtors and mortgage brokers across the Island are reporting that 100 percent financing is a thing of the past. ‘It’s absolutely true that deals are falling apart,’ said Ed Munteanu, whose Islandia-based New World Capital does 60 percent of its lending to people with poor credit histories.”
“He said that in the past six weeks, 30 to 35 percent of the subprime loans he has handled have fallen through as lenders and investors have tightened their guidelines.”
“‘Those prices they were seeing in late 2005, they’re gone, they’re history and they’re not coming back. At least not any time soon,’ said Bethany Marten, president of Home Buyers Resource Center and Mortgage 1,2,3 in Baldwin.”
The New York Journal News. “To see what happens when a slowing housing market meets a high-risk mortgage market, just stop by the lobby of the Westchester County Courthouse nearly any day of the week.”
“RealtyTrac reports a continuing rise in the number of homes entering foreclosure in Westchester, Putnam and Rockland counties. ‘It’s a perfect storm of events,’ said Gary Brown, director of consumer protection for Westchester County.”
“‘It’s pretty bad,’ said Gerri Levy, executive director of the Rockland County Housing Action Coalition. ‘Some people I really feel for and other people I think were taken advantage of by the banks. I had a woman call me this week who makes $24,000 a year and the bank gave her a mortgage for $360,000. Honestly, I can’t see how much more predatory a loan could be.’”
“‘When banks start losing money, it will get worse,’ Levy predicted. ‘There will be less room to negotiate.’”
The Free Press from Vermont. “Foreclosures in Chittenden County jumped 37 percent from 2005 to 2006. The problem is not limited to Chittenden County. Foreclosures increased roughly 23 percent in northwestern Vermont, according to a Free Press analysis.”
“When property values were increasing more than 10 percent a year, as they have been in Chittenden County for the past six years, it provided a reserve fund homeowners could tap at will. ‘They could sell the house or they could borrow more to cure the default. Now, we have a flat or declining market, and those options aren’t available,’ attorney Joshua Lobe said.”
“Homeowners have been ‘borrowing significantly’ against their home through secondary mortgages in recent years, he said.”
“‘The biggest problems with the foreclosures today is we are dealing with out-of-state lenders,’ said attorney Ray Obuchowski of Bethel. ‘And unfortunately, the days of negotiating with your local lender has gone by way of the buggy whip.’”
The Republican from Massachusetts. “Michael J. Farrell specializes in helping people in various kinds of financial distress. In the late 1980s and early 1990s, the problems were mostly due to plunging real estate values.”
“‘Now it’s the subprime lenders who have caused these problems,’ Farrell said. ‘What we’re seeing is extremely high debt-to-expense ratios, where a typical bank would never write the loan,’ Farrell said.”
“He pointed to John Quick’s case, where Quick’s girlfriend has an annual income of about $7,000 to $9,000 from her waitressing job, and the mortgage company loaned her nearly $273,600 last July to buy their house from Quick.”
“Quick, who had been out of work and was facing foreclosure, contacted a mortgage broker he had used before who found a lender to give Quick’s girlfriend a $273,600 mortgage to buy the house from him, so they could both continue to live in it.”
“They went from an 8.9 percent mortgage to 11.5 percent, and from a monthly payment of $1,700 to $2,700. Now they’re facing a foreclosure auction Tuesday morning on their Warren home.”
“‘We got bilked big-time,’ Quick said. ‘The guy I trusted’ said the monthly payment was going to be lower than the $1,700 month he had been paying.”
“Farrell added that the documents contain forgeries submitted by the broker to NovaStar Financial, the lender. Farrell said that lender NovaStar Financial has not responded to six letters regarding Quick’s case.”
“‘It’s a perfect storm of problematic circumstances,’ said Bruce Spitzer, spokesman for the Massachusetts Bankers’ Association.”
The Boston Globe. “With record numbers of Massachusetts homeowners facing foreclosures, Secretary of State William F. Galvin today will urge the Legislature to require mortgage lenders to get permission from local judges before they seize the homes of delinquent borrowers.”
“‘You have the right to dispute a parking ticket but not to dispute the taking of your home,’ Galvin said yesterday. ‘We have to move now. This demands urgent action today.’”
“‘Maybe the borrower has valid reasons’ for failing to pay, said David Volman, an attorney in Shelton, Conn., who represents homeowners facing foreclosure. In Massachusetts, ‘there’s no judge monitoring’ the process. With no oversight, he said, lenders ‘are going to do whatever they want.’”
“Volman added that it is unrealistic to expect homeowners who can’t afford mortgage payments to hire an attorney to try to stop foreclosure.”
“Not all notices filed in Land Court result in foreclosure But in a soft real estate market where home prices are falling, agents said it is impossible for many borrowers in this position to raise enough money to refinance or pay off the outstanding balance of their loans.”
“Kevin Cuff, executive director of the Massachusetts Mortgage Bankers Association, said mortgage companies oppose Galvin’s proposal, which he said would cause an ‘unacceptable delay’ for lenders.”
“‘You’re going to have legitimate foreclosure proceedings that are going to get hung up in court, and the lender is going to be out, and the investor’ who buys those loans from mortgage writers ‘is going to be out,’ Cuff said. ‘It’s going to throw into disarray the entire process.’”
This is all hogwah it is diffrent here.
lmao
This is all hogwash it is diffrent here.
lmao
Singing my tune MGNYC –Case-Shiller report on city markets shows NYC prices down too, just like everywhere else.
And Mayor Bloomberg’s latest budget request asks all city agencies for budget cuts (despite a surplus now) because “good times don’t last forever.”
There are a lot of rich folks (mostly in Manhattan here), but not enough to overcome simple math. And I refrain: Incomes in NYC and its boros do not support high price levels.
By the way, Daily News had interesting story yesterday about subprime mortgage holders in trouble — 46,000 or so in NY state — a bit more than half of those in and around NYC.
So if you figure there are 26,000 -how big of the total percent of home buyers does that add up to? I think it is quite significant — am trying to get numbers but if anyone else has good source let me know -NYSAR just has sf home data for brooklyn and queens (which at around 8,000 total for ‘06 makes me shudder to think how many of those sf homes were subprime - I bet quite a lot, if 26,000 subprime buyers are in hot water).
I’m not a fan of Mayor Bloomberg, but at least he realizes that all parties eventually come to an end. Around CA I see and hear of cities that are spending like drunken sailors on shore leave. Brilliant!
San Diego is one of them. They are going to celebrate that they can borrow again by going out and get $2B deeper in debt. No need to raise taxes, obviously.
“Case-Shiller report on city markets shows NYC prices down too, just like everywhere else.”
I don’t think anyone has claimed anything different. There are claims that prices are up in Manhattan though which is not the same thing.
UES think REBNY- they issued a glowing report about brooklyn a couple weeks ago claiming prices were up. (Of course they buried the fact that they based it on 2006 data, and did not parse out the drops at the end of the year in their thin press release.
Realtors have been spinning the “it’s different here” line constantly this year — and claiming it applies to all of NYC –often based on either old data or new data they claim are rosy but will not release to the public. My point is, the numbers say it’s not.
Bubbles are always driven by liquidity. We now have contracting liquidity and now we get a reverse bubble, otherwise known as a bust ! We’ve been waiting for this for a long time and its finally here. Even Cramer was saying this morning on CNBC to stay away from the homebuilders !
We are going to see months and months of downward home prices and bad news in the RE space. And its accelerating. Its going to get worse and worse and worse until everyone agrees houses are a terrible investment. When you go to a party and people laugh at you for wanting to buy a house, then it will be time to buy.
We need 3 things to really finish this off. #1) Gas prices need to go to $4 or $5 a gallon. That would kick all the big shot Hummer drivers in the a$$. We need the fed to have to raise interest rates a time or two to combat inflation. That would kick all the speculators in the a$$. And then we need a few banks to bankrupt. That would kick Wall Street in the a$$. Then maybe people wouldn’t be so stupid with their money next time.
“We need the fed to have to raise interest rates a time or two to combat inflation.”
I don’t think they plan to do this. In fact, I expect them to try to inflate the stock market to offset weakness in the housing market. I expect this to happen today — watch the headline indexes plunge on bad news this morning, only to return to near opening levels by day’s end.
Did you read Stephen Roach’s piece yesterday ? The fed can keep inflating and building bubbles. Sooner or later it has to stop. Consider this: ‘87 we had the LBO fiasco. ‘91 Japan crashed. ‘98 we had the Asian currency crisis. 2000 we had the dot com crash. Now we have a housing bubble. In each of these circumstances, the response was to make money cheap to spur consumer consumption. The difference is this time the consumer is tapped out. Interest rates are nearly as low as they can go and consumers have way more debt than they can handle.
I think what is going to come out of this all is that interest rates have to be higher to avoid the formation of bubbles.
Money inflation always has an end game, no two ways about it. Eventually, the inflation road always leads to a dead-end. The fact that this country has been able to play this game for several decades and keep it going is pretty impressive, but like the expert juggler, sooner or later there’s just too many balls in the air.
Now we have a housing bubble AND a credit-driven private equity bubble which isn’t much different from the LBOs of the past.
“Sooner or later it has to stop.”
I think BB may be determined to learn this the hard way, rather than defer to the wiser of his predecessors.
“The job of the Federal Reserve is to take away the punch bowl just when the party starts getting interesting,…”
http://en.wikipedia.org/wiki/William_McChesney_Martin,_Jr.
The only way to fix this whole problem is to bail out the entire housing market. Not even the fed has that kind of money. They might be able to print it, but if they do, their credibility will be zero and they will never float another bond again. Do you think America can live without debt ? I doubt it !
Do you think America can live without debt ? I doubt it !
The reason we are all in this mess is because of debt. National debt, state and municipal debt, corporate debt and of course personal debt. To say that we are now too far gone too reverse this trend is not good. I am not advocating eliminating debt all at once, I am however advocating making debt slowly tougher and tougher to get. At this time, the markets are doing this in response to pain stimuli.
And if we suddenly turn into a nation of savers, we’re really screwed. Consumption is all we have left.
I agree. Cheap money is here to stay for the short term. Euro looks good for now.
instead we will get lower rates and the monetization of 401(k) and IRA’s.
Gas at $4 or $5/gal. is not too bad if you amortize it over 30 years.
Bartender, hit me with another Heloc.
…but people always laugh at me when I go to a party.
years…not months…of bad news.
Debt saturation is now complete. You’re going to need a lot of popcorn to watch this mess unfold.
57,300+ homes on the market in the Phoenix metro area. Perfect storm is a brewing for the AZ RE market…
And winds are predicted today in N. AZ at 50-60 mph…
might just blow down these cracker boxes that pass for homes.
No way. They are held solidly in place with granite weights.
oh yeah, I forgot! That, and stainless stain.
And marble entries and very heavy flat panel tv’s.
the winds are blowing in kingman right now.nothing selling now.
Glen Campbell time…
I’m a loanman for the county and I drive the main road
Searchin’ in the sun, for another “pot of gold”
I hear you singin’, you obvious liar, I can hear your whine
And the Wichita Loanman, knows it aint all fine
I know you need a small debt relocation, but it don’t look like most of you are fiscally sane
And if it gets hot down in el lay, it’s because there’s been no rain
And I need you less than you want me, as I watch your finances decline
And the Wichita Loanman is going off-line.
That’s not the wind blowing. Kingman sucks so bad, it’s pulling in all the outside air.
Ahhhhhhh winds on farmed out flat dirt land as far as the eye can see, old cotton fields turned in tract homes. Thats Phoenix -like a very dry version of CA central valley. When the winds pick up it blows dirt for a hundred miles. Its different here.
Obviously, March’s slow sales will be due to today’s bad weather.
“With record numbers of Massachusetts homeowners facing foreclosures, Secretary of State William F. Galvin today will urge the Legislature to require mortgage lenders to get permission from local judges before they seize the homes of delinquent borrowers.”
OMG
Last nite I was wondering why the Massachusetts posters are always dissing their state. Now I know why.
What an idiot. Do you think he consulted any economists before he blundered into this nonsensical policy? Does he realize that lenders just drew an imaginary red line around his entire state?
Not a chance. Politicians here in Mass pander to the poor and needy. The legislature is 86% Democrat and there’s no balance in politics at all.
You’re missing the point–Galvin and his buddies and those middle class suburbanites who vote for him and his ilk don’t want their property values to go down. They may have HELOC’ed, think their home is a retirement plan, or just have an ego thing about it. Softness in subprime means their values go down, so the softness must be stopped! Now!
As for myself, I’m more suspicious of the governor … I mean, he was on Ameriquest’s payroll, and he seems to be in with all the “right” people. At least with Romney, he may have been a major d*ck but you always knew where he stood.
What a mess. If mortgage lenders are unable to repossess houses when mortgages aren’t paid, that will REALLY put a crimp in how willing they are in future to lend to anyone with a hint of risk. The Law of Unintended Consequences is set to take effect here, and in a year or two the pollies in the Massachusetts state house will be howling that banks aren’t lending money anymore!
If we are lucky, those in power will realize that foreclosure is NOT something that happens all of a sudden, like a parking ticket. The facts are rarely in dispute, and the “evidence” builds over a period of months.
“Volman added that it is unrealistic to expect homeowners who can’t afford mortgage payments to hire an attorney to try to stop foreclosure.”
If the homeowner can’t afford the mortgage payments, Mr. Volman, that is THE VERY REASON that the foreclosure has been filed. Do you recommend that people who cannot afford mortgage payments keep the house? What kind of topsy system is that? (Oh wait, this is Massachusetts… never mind…)
“If mortgage lenders are unable to repossess houses when mortgages aren’t paid, that will REALLY put a crimp in how willing they are in future to lend to anyone with a hint of risk.”
Is it legal for lenders to redline bailout states (like Mass)?
I have never heard otherwise, though that don’t mean it’s (not) so. That said, a quick read of the ECOA and a few other regulations indicates that geographic location does not seem to pose a specific problem, especially when a very large and various population cross section is affected. (otoh, if the region was all-minority could be problematic)
Now as a matter of practice, it seems that different mortgage products are already out there for different regions. A quick check of BankRate 30-year-fixed mortgage offers comparing Harrisonburg, VA, with Boston, MA, shows that on the cheapest offers Virginians will pay a fraction of a percent (e.g. 0.1% to 0.2%) *less* interest than Bostonians.
Massachusetts is a red state, like communist red.
And the problem in Vermont… is that all the leftists there think it’s a competition to keep pace with Massachusetts.
I can’t wait to see what “solutions” the Legislature there will try with regard to “fixing” the bubble fallout.
Absolutely. We would recieve guidelines on new loan products all the time that had state exclusions, even particular counties would be excluded as eligible for certain loan products.
I’m not stating any support for this proposition but I just wanted to clarify the article…I was under the impression that MA was not setting precedence on this. Sounds like 30 other states already require court approval if I’m reading this correctly.
So how’s it working for them?
“Massachusetts is currently among some 20 states, including California, Idaho, New Hampshire, and Texas, that do not require court approval when homeowners default on mortgage payments.”
I, for one am all for this type of government intervention… housing prices are still completely unrealistic in Mass. If this type of legislation is passed, it should dramatically increase the difficulty of getting a mortgage and thus put even more downward pressure on property values. I already have a cash-flow positive multi I have no intention of selling anytime soon. My next purchase will be a SFH and when I do, I will have 20% down, no debt, and excellent credit.
This type of law will have the unintended consequense of removing any and all speculation from the housing market in Mass and levelling the playing field as far as price/income. Heck, we may even see the return of standards as to who qualifies for a mortage if lenders know it is harder to forclose on a property.
Everyone should qualify, every single breathing human, resident or illegal, money or no money. Imposing lending standards is just dicrimination against people that are under-housed and under-monied. They need to pass a law that makes it illegal to deny any size loan, regardless of ability to repay it, to any human, and possibly chimpanzee too, because they are kind of like little people with more hair and bad teeth. Then they need a government bailout program that repays defaulted loans. Better yet maybe make forclosure illegal altogether?
And legalize looting, damn-it!
I recall my first meeting with a Phoenix attorney in 1993 when I was starting to lend my own money on AZ properties. He informed me that AZ law is “lender-friendly”. Just glad I have never made a loan in Massachusetts.
I wonder if the Massachusetts Attorney General considered the signal he is sending to deadbeats: “Don’t worry about buying a home you cannot afford, as my proposed bailout will force the lender to get a local judge to grant permission for them to foreclose on you.” What lender would make loans that enable buyers to purchase homes they cannot afford under these terms?
I’m going to rent out my aged wheel-chair bound grandmother to FB’s in Mass. Show up with her in court and esplain you must ‘care for your mother’ and ‘cant move’ = FREE HOUSE.
Avoid foreclosure indefinitely while collecting rent on the place and making no mortgage payments. $200 per hour cash only.
call now 1-800-BAI-LOUT
Paid in advance of course.
Sounds like the mortgage companies need to beat the legislation by foreclosing and kicking as many people out as possible before any legislation is passed. If not, what you will see is price controlled rent for SFH where you expect the former homeowner to maintain the property and pay its taxes. It ain’t a’gonna happen. What you will get is a bunch of deadbeats who don’t pay rent that you will have to evict.
Exactly. Anybody with a NOD will definitely delay, while filing motions for extensions and delays. Additional hordes of marginal owners will stop making payments, making the problem a crisis requiring more intervention. Or, being completely cynical, the legislature is only posturing while “shaking the money tree” to get contributions from the banks, etc. to not pass this thing. Watch it morph into the state helping make the payments, which will bail out the banks instead.
hahahaha I wonder how much money these lenders will make off there Mortgage lending now ? I almost want this to pass just to spite Goldman and the other Mortgage re-bundlers. Read “Liars Poker” for a look at the Mortgage past, great book.
It’s hilarious that after years of no reaction we’re suddenly in over-reaction mode. These guys are all scrambling around pulling their so-called solutions out of their asses. It’s like watching a bunch of monkeys hump a football.
Apologies if this has already been posted, but here’s more football humping by monkeys:
http://www.latimes.com/business/la-fi-subprime27mar27,1,2315678.story
“THE MORTGAGE MELTDOWN
State regulator calling for ban on stated-income loans
He says borrowers who overstated their means, and their lenders, have
contributed to the sub-prime collapse.
By Marc Lifsher, Los Angeles Times Staff Writer
March 27, 2007
SACRAMENTO — With as many as 460,000 California homeowners reportedly
at risk of losing homes bought with sub-prime mortgages, a top
California business regulator called Monday for a ban on certain risky and controversial lending practices.
At issue for Department of Corporations Commissioner Preston
DuFauchard were home loans being issued without lenders fully
verifying the prospective buyer’s income and employment status. These so-called stated- income loans have contributed to the collapse of the sub-prime mortgage market, he said.
‘It’s a real fluid situation,’ said DuFauchard, who has asked Gov.
Arnold Schwarzenegger whether the commissioner can require about 8,000 mortgage and commercial loan lenders in the state to fully verify a prospective buyer’s income and employment status to ensure that he or she can afford a loan.
The testimony came at a hearing of the California Senate’s Banking, Finance & Insurance Committee, which also heard the estimate of 460,000 possible foreclosures from consumer activist Paul Leonard, director of the Oakland-based Center for Responsible Lending…”
You know, I really am getting disgusted with this country. The fact that we need politicians (who are some of the lowest forms of life) telling lenders that they need to verify a person’s income and ability to actually service the loan is beyond pathetic. I honestly cannot pinpoint when and where it all went so wrong in the USA. Only now are the pols waking up, when the horses left the barn long, long ago. I have no doubt in my mind that if the politicians are able to intervene then they will eff it up like they always seem to do. Just let the bubble implode naturally. Will it be awkward for a while? Yes, but it must be done.
This is never going to happen. Government *WILL* bail out big business, it’s just a question of how, not if.
The free market approach for pricing risk only works if there is truly a free market approach for business. This is not currently the case; corporate status is already a form of state sponsorship. In order for “market forces” to sort this out “naturally”, the companies involved must bear the full burden of the risk they incur: no government guarantee, no tax breaks, no input into legislation, and no bankrupcy protection – if the business fails, go after the private assets of the people in charge. I think we would all agree that lending (and business in general) would be much more conservative without government collusion.
Good points, I agree. Corporations are tied to government collusion. I guess I just meant that they should let it implode as “naturally” as is possible. I agree that big business will be propped up in some form, as much as that annoys me.
In order for “market forces” to sort this out “naturally”, the companies involved must bear the full burden of the risk they incur.
Annata, nice, but unrealistic. Just look at the way taxpayers have been insuring the Malibu mansions that burn every ten years, the reconstruction of New Orleans so that it can be washed away again and rebuilt again, the war in Irak so that Halliburton and co. can become even richer while wasting young American lives. We are living in a world where the risk has been socialized and the profits remain private. It’s the ultimate perversion of capitalism.
I agree; a completely free market is unrealistic, or at least, it does not even remotely describe the economic model of the US. I merely wanted to point out that letting the bubble pop “on its own” is equally unrealistic. You cannot expect government to “bring jobs to the state” and “encourage business” and then expect government to step out of the way when one of those schemes turns out sub-optimally.
Stated income loans are such a sham. Let’s see, you want to borrow money but cannot document your income. Why is that? Could it be you are ripping all of us off by not paying your taxes? Only in a country this focked up can they have a loan product advertised in the light of day, for people that are breaking the law.
If someone is lying about the income they earn, what makes you think they are trustworthy enough to pay back the money you give them?
HI Joe,
I certainly hope people are avoiding taxes. The money that you earn (yes, even you, Joe M) is much better spent by you than the types of politicians who helped create this mess, and who will use more of your taxes (especially yours, Joe) to bail out the FB’s and banks that got themselves in trouble.
That having been said, stated income loans are geared to people who don’t get regular paychecks. Not all of us are bi-weekly wage slaves that have to ask other people to support us (sorry, too harsh) I mean many of us own businesses, work on commissions, or have various deals we chase to put together the amount we earn throughout the year. It is not quite gov’t work with union guarantees, pensions, and no incentives. Many of us work hard to create value for people, and as a result, are much more financially aware, responsible, and even credit worthy than a typical wage earner.
That crooks use them to take advantage of the system and get themselves in over their head is a separate issue. Lets hope they are not stealing from YOU by not paying their fair share, so that they can stand in solidarity with you as you pay for the bail out.
Paul
There are apple chunks on my keyboard now.
Monkeys on a football… killer.
Mazzholeland-Home of the $40.00 per hour utility “flagman” cop.
LA Times video reports record foreclosures in California http://www.latimes.com/
Dude, easy with the Cali post. The east-coasters have the floor.
Just saw this over at Yahoo Finance:
Bankrate.com
Amidst the subprime mess, a recent poll shows over a third of America’s homeowners don’t know what kind of mortgage they have.
Isn’t this just amazing? The biggest loan most of us every take out, and one that usually commits for 30 years, is our mortgage.
When did Americans become so financially illiterate and wreckless? Hate to say it, but part of me thinks we need a good recession to get Americans focused again.
I’ll say it without remorse - we need a good recession to get us focused again.
I’ll say this then with only slight remorse - we need a good depression to get us focused again.
(only this time let’s please not implement socialist programs to attempt to get us out)
I agree, I’d love to see a good depression. We are set up well, with no debt and ready for it. I’d love to see all the idiots wiped out financially.
“I’d love to see a good depression”
That thought has crossed my mind too, although I’m not sure there’s such a thing as a “good” depression. My parents report that the Depression with all its hard times was a good time to grow up, as long as you had food and family. The people who thrived were those with solid values. Those that suffered were those without.
I asked my brother what his interest rate was on his mortgage and what was the term. He didn’t know; he just knew what his monthly payment was. His approach to life has always been to take things as they come: no forethought required. So, he’s got a house to live in and a vacation home (for which he also doesn;t know the terms), lives paycheck to paycheck, and borrowed from his retirement savings to afford his houses, both of which he bought in the last three years. So who’s the smart guy, the guy with the two houses who will likely get bailed out by the government if things go sour; or the guy who makes careful decisions and keeps his cash in a mattress? I’m starting to think that this country is designed for the non-thinking masses.
“I’m starting to think that this country is designed for the non-thinking masses. ”
You don’t watch much Television do you?
I don’t even own one. I’ll watch it outside the home, if it’s unavoidable, but that’s about all.
I much prefer reading.
What the heck is on that’s worth watching? 57 channels and nothing’s on is right. I will say this, DVR is the way to go. Find out what’s worth watching, then watch it when you want to watch it.
I have a whole slew of relatives on my wife’s side of the family, including her, that make no long-term financial plans whatsoever. They spend everything they earn and more. They all have some form of 401K but I would be willing to bet that the amount they have in those accounts is small. I think they represent a large, large chunk of this country who have never really known hard times and are completely unprepared for what will become a more and more uncertain future.
You are absolutely right. In a country with an inflationary fiat currency and liquidity driven by increased productivity and growth in foreign demand you can miss a VERY big party if you don’t participate. A word to all of you doomsdayers is that history moves very slowly. The unwinding of our unsustainable sytem could happen over 50-100 years - long after we’re dead. Most of you are right about the logic but wrong about the reality. There is a lot of money to be made in an inflationary (asset) environment. I have to laugh at self-righteous posters who think it’s morally wrong to participate in this unsustainable system - and take joy in others getting hosed by it. The smartest people are the ones who are in when it’s good and out when the sh(*&t hits the fan - not the ones who are out the whole game and ready to say “I told you so”. I’m not offended by bubbles and look to participate on the way up and hope to be out when they pop.
“… hope…”
Hmm… that seems like a sound strategy.
Nicely said. I’ve been feeling we’re on the brink of some sort of nationwide collapse for years and treading carefully so as to have the last laugh. Better to go along for the ride with the masses than hope for a collapse that might be years and years away, if it ever happens. If things get that bad, well, misery loves company. In the meantime, it sucks sitting on the sidelines watching the “idiots” prosper.
what shortsighted and silly people you both are (not you sf). no wonder this country is doomed. try doing something productive instead of riding “ass”et bubbles.
“Amidst the subprime mess, a recent poll shows over a third of America’s homeowners don’t know what kind of mortgage they have.”
Conclusion: Over a third of American homeowners are NOT smarter than a fifth grader.
http://en.wikipedia.org/wiki/Are_You_Smarter_Than_a_5th_Grader%3F
Hell, they’re not even smarter than Jeff Foxworthy!
Careful…The Fox is just under what Larry the cable guy rakes in……over $300k per performance. Anyway you cut it, that ain’t dumb…
You should read Mr. Foxworthy’s resume - it is pretty. A graduate of Georgia Tech, IBM for 5 yrs. Not your redneck that he portrays.
I’ve seen that before Hoz. He’s no fool. Just shows you need to get the facts before drawing conclusions. I have little doubt his financial success far exceeds what he would have made as a chump engineer.
So Jeopardy is a what grader? It’s been a popular show for a long time.
Hey, I really liked the “General Electric College Bowl”, except when one of my alma mater’s got creamed.
http://www.imdb.com/title/tt0177442/
“Amidst the subprime mess, a recent poll shows over a third of America’s homeowners don’t know what kind of mortgage they have.”
Denial Deluxe. Who wants to admit they’re in a house they can’t afford, not really?? Who wants to look in the mirror and acknowledge making the biggest financial mistake of their life?
“I had a woman call me this week who makes $24,000 a year and the bank gave her a mortgage for $360,000.”
and these are the people they want to bailout???
how did she ever expect to pay on a loan that size….
let these greedy speculators lose everything they have.
Holy crap!!
That’s got to be a new record. I would like to do the take home pay to housing payment calculation, but I am afraid I will get a divide by zero error.
Nope, the waitress mentioned here has got her beat by a mile at 30 to almost 40 times income.
“He pointed to John Quick’s case, where Quick’s girlfriend has an annual income of about $7,000 to $9,000 from her waitressing job, and the mortgage company loaned her nearly $273,600 last July to buy their house from Quick.”
When is that stuff going to stop?
When the money runs out ! Its no different than when people paid $300 a share for somenewidea.com
I thought the New Century crap was going to turn off that faucet.
It will, just wait. The tap is still dripping. We are seeing the last bit of remaining liquidity. A month from now the stats will come out that sales and prices have dropped even further. Banks will increase the equity required on a mortgage and foreclose on more marginal houses, making things even worse. Its a death spiral.
“let these greedy speculators lose everything they have. ”
These greedy speculators probably do not have too much to lose, while the morgage lender will lose much more.
“These greedy speculators probably do not have too much to lose, while the morgage lender will lose much more”
There are a fair amount of speculators with income over the BK threshold that will spend the next couple of decades working off phantom equity for a house they no longer own. How’s THAT for an ass-pounding!
Hey, where were you the other day. We were going off on the sodomy innuendos and you were nowhere to be found.
They can just walk way if they think they will lose to much and leave the stake to the lender, while messing up their credit score.
“He pointed to John Quick’s case, where Quick’s girlfriend has an annual income of about $7,000 to $9,000 from her waitressing job, and the mortgage company loaned her nearly $273,600 last July to buy their house from Quick.”
I can’t tell you how much this infuriates me personally. We’ve just been jerked around by a car dealer who wanted us to pay 10% for a car loan (doing this to add a “trade line” to my husband’s credit record which is virtually nonexistent). We have zero debt, a six figure income and significant other assets. We get these scuzzy banks claiming they can’t lend any lower than that because he has no car credit record (we pay CASH for chrissakes!). I hate paying cash right now when you can borrow at 5% but I’ve about had it with this whole system.
“Now it’s the subprime lenders who have caused these problems,’ Farrell said. ‘What we’re seeing is extremely high debt-to-expense ratios, where a typical bank would never write the loan,”
I like this… the borrower is not even in the picture as responsible party. Instead, it’s all those out-of-town subprime lenders, many of whom have conveniently blown up and gone away, certainly not your friendly local bank and political contributor to local politicians, who caused all this heartache.
Politicians used to give banks a hard time for NOT lending to the poor. Now the opposite is true. How can banks conduct business when lawmakers keep changing the rules?
hey tx-i hear you i have to get anoher credit card to increase my credit availibilty becuase i have a visa for like 6k but i also have an unlimited amex but becuase it has no limit my total available credit is only 6k according to the 3 reporting agencies and i usually charge several thousand a month so it looks as if i am using more than 50% of my available credit whihc will lower your score. regardless that i never carry a balance and pay in full each and every month.
need more coffee sorry for the poor spelling
No, no, less coffee so you won’t write any more 90+ word sentence …
The same problem happened to one of my sons. Middle FICO 727, down payment 50% on a new truck, but little credit. The dealership put him at 18% - as soon as I was told took him to my bank and refied at 5.9% - no cosign needed. Suspect it was the dealership getting greedy, not credit issues.
Of course it is. They tried a bait & switch/yo-yo on us too (to an attorney, can you believe it??) I let them do it because I’m going to sue their asses and make them sorry they ever met us.
We bought a car with a Capital one Check a couple of years ago at a fixed no strings 3.99%. The dealership was still trying to run our credit report and sell us on thier loans, until they really believed we were walking out the door. My first loan I also got ripped for 18% because I was self employeed and had no credit. I paid 2 and 3 payments a month to kill that puppy.
I would’ve thought most posters on this blog would’ve been paying cash for their cars … ????? Certainly I have never borrowed for a car.
Honda only charges me 2.9%. A good savings account now days returns around 5%.
Than when you try to pay cash for a car the salesman doesn’t like it because they can’t get back points on the financing deal .Act like your going to finance the car than at the last minute switch to a cash deal and see them the car people want to change the deal .
I can’t wait to do that…….I USED to think that telling them that you were a cash payer was a plus - HA! But my husband and I will be running our Camrys into the ground before we get to play that game.
car shopping has turned into the equal of a root-canal
The way to car shop is to get a loan pre approved elsewhere, if you even need a loan, figure out exactly what you want and then shop by phone. And order the model you want from the dealer that gives the best price. It takes a few months to get in, but you get what you want and you don’t have to play the “we are the only ones that have it game.” The other way to win is to buy right at the end of the model year.
actually, root canals aren’t so bad.
With respect to car shopping, I have done the following twice successfully:
1. goto fightingchance.com and pay $20 or so for the dealer codes and local market survey.
2. get own loan from credit union or wherever.
3. fax detailed offer (they give you a form letter where you put in the dealer codes) to as many dealers as you can find in your area. I did about 30 each time.
4. Settle the deal over the phone or fax by playing one offer against another.
5. take delivery of auto at your home.
This avoids having to go to the dealership at all. You’d be surprised how many dealers will want to play since you have given them all of the right codes and otherwise minimized their work.
Just get a bunch of credit cards and charge everything. Go online and set up a bank draft to pay $100 or so every month so you never get a late payment and then pay the rest online before the due date so you don’t pay interest. Only use two credit cards at a time and every three or four months make sure you paid off all charges on those cards and switch to a couple others. I pay all my bills online and do the credit card thing and my FICO is +800. It’s just a game.
The problem with that is I hate credit card companies with a passion. Even if you pay your balance in full the merchants have to pay a few % in transaction fees, which gets passed on the cash, check, money order, and debit paying customers.
How is an ethical person like me supposed to get a good credit rating?
The merchants pay the fee because they think it will increase their net profits, and most likely, they are correct. They are doing it out of self-interest, not because the credit card companies are forcing them. Why should the credit card companies provide their services for free? In my opinion, there is no ethical problem here; this is one of the relatively few win-win scenarios.
If you have an issue with cash-paying customers paying for part of that credit card fee, then that is really the merchant’s fault, not the credit card company’s. The merchant could charge higher prices for credit card users, or simply add the credit card fee to that particular transaction. In fact, in the early days of credit card use, some merchants did this.
I do have an ethical issues with credit card companies, but it is because they encourage people to spend more money than they have on crap they don’t need. But in this way, they are not different from 99.9% of businesses.
The credit card companies force merchants to agree to charge the same price for credit card purchases. That’s why credit surcharges or official discounts for cash are so rare.
Most CC merchant account agreements today forbid the merchant from charging more simply for using a CC. Some are grandfathered in with old agreements, some have a “cash discount” exemption and some just don’t care, but adding on a 2% surcharge to CC purchases is a good way to get your merchant account shut down.
The cost of CC processing really isn’t that big an issue for most merchants. There are enough processors out there that rates can be reasonably competitive (around 2%), and I’ve seen studies that indicate that people are more willing to buy, and spend more, when they can use a card. There’s the obvious “it’s just credit” aspect, but there are consumer protections and card benefits/rewards as well.
The main problem for merchants, especially Internet merchants, is that all the responsibility for fraud prevention is on the merchant. The banks provide basically no help in detecting fraud up front, and the merchant is almost always presumed guilty and gets the chargeback. The time and cost of fighting the CC’s makes it pointless for all but the most expensive chargebacks.
Yeah, My business pays 1.64% plus $0.25 per transaction, plus $17.99/mo software lease to run cards. All of this I eat, ’cause I can get larger jobs, and credit customers are much less price sensitive when they pay with a card.
The cards pay for themselves with volume.
Paul
I use lots of credit but pay the cards off religiously, which results in a 800+ FICO score. On top of that, I have about 10 rewards cards and opportunistically switch between them. My average refund is 3% of all spending, but it ranges from 1% to 5%. (Citibank allows you to construct the broadest reward base through 3-4 different cards.)
How is an ethical person like me supposed to get a good credit rating?
Yes, the merchants do get slightly screwed but they have factored this into the prices REGARDLESS of whether you use a credit card. If a merchant has a “2% off for cash” deal than pay with cash, otherwise you are just leaving the money that they have budgeted for transaction fees on the table.
(Be aware that card users who carry a balance subsidize your credit card use–they pay 15% to 35% and the card company covers your expenses/rewards out of that take. The companies do this to raise the aggregate rating of the credit pool.)
I actually want to augment my last post. Merchants don’t lose anything by taking credit cards. Anyone who thinks that merchants are losing money on the purchase hasn’t ever worked in a business in a supply chain. I used to work as a delivery driver for an auto parts store. I delivered parts to mechanics, so I saw our wholesale price for parts, our retail price to the public, and the price the mechanic charged customers—I also had a relative working for the wholesaler, an I knew the price that the remanufacturer charged the wholesaler—and at every step of the supply chain the price of an item doubles. I don’t have any gripe about the realities of distribution—that merchants apply these markups is the entire reason that good reach consumers—but I have to object when people bemoan merchants paying fees to credit card companies. The fee almost certainly comes entirely out of the merchants profit and not the pockets of other consumers, and they make up profits with expanded sales.
I think that you’re missing the point with credit cards: the increase in the volume of business offsets the merchant’s fee. I’ve seen businesses try to add a surcharge to my credit card purchases, which is a violation of the merchant’s agreement—to justify the practice, one restaurant brazenly wrote in their menu that they didn’t believe that the “greens” should pay for the “plastics”—and I always call to report the business to the credit card company. If a business thinks that the practice is unfair, if they really are passing the cost of credit card transactions onto everyone else, then they shouldn’t take credit cards at all. Personally, I don’t think that I should pay for anything that I don’t desire and from which I don’t directly benefit, like air conditioning in a store, but I do it all of the time trusting merchants to make good decisions that are ultimately reflected in my bottom line, their prices. The responsibility for negotiating tradeoffs belongs to the business and not to the customer.
I use my credit cards because I object to bank fees—you pay more in fees now for less service than you would have thirty years ago—and I find that bank fees amount to a lot more of a headache for a person like me who pays his card in full nearly every month but sometimes uses the revolving credit to spread a large purchase over a couple of months. Try to negotiate that kind of deal with your bank.
If you want a good credit rating, the prvious poster was right: get a credit card, and use it responsibly.
The “greens” vs “plastics” restaurant was probably cheating on restaurant taxes.
I mean, get real, restaurants lose a lot of cash thanks to employees taking a dollar here, a dollar there. A restaurant that prefers cash is one that wants to operate under the table–and it might not just be tax fraud motivating that.
If y’all would pay cash for EVERYTHING, you would not need “good credit”. I have lousy credit. Nobody ever heard of me. I pay for everything with a Visa card from my brokerage house — it’s effectively a debit card even though it looks like credit. When I try to rent housing I just present a Xerox of my brokerage statement. FICO for what, is my motto.
I’m with you, az_lender - cash for everything. The next time I buy a home (if I ever do) it will be with cash. FICO is so … middle class.
That’s funny.
I’m no where near that league, but I get a taste once in a while.
I’ve posted about my landlord being foreclosed upon. I found a one bedroom house w/ garage that seemed right. The owner has had problems with renters in the past (apparently the last one was taken away by the FBI), so he wanted an APPLICATION, and the rent had to be paid by CHECK. I said no problem. Filled out the app, gave him copies of my bank statements, and he called me back, creaming his pants, to close the deal.
I make squat*, but I’ve always paid, and am debt free.
Good Feeling.
Paul
*~30k owning a cleaning business.
“He pointed to John Quick’s case, where Quick’s girlfriend has an annual income of about $7,000 to $9,000 from her waitressing job, and the mortgage company loaned her nearly $273,600 last July to buy their house from Quick.”
Sounds like nothing more than another hairbrained get-Quick-rich scheme
h_a_n
aka passthebubbly
TX Chick, you’re like my parents, in that you pay cash for cars. They’ve been going to the same VW dealer since the 1960s. This place is more than happy to take their checks for the full amount of the cars they buy.
So, keep on shopping, kiddo.
You’re better off paying cash for a car if you’ve got the $$ laying around. I sympathize, though. I would think your income and assets would be enough for most lenders–it’s not like you’re a kid right out of college.
Yeah you would think so but my husband’s credit record consists of two lines, a 20 year old student loan long paid off and a crappy little credit card we just got. That apparently is a license to steal by these thieves.
Like trading Tx, don’t fight the system capitalize on it. Take a couple loans here and there then pay them off in full ahead of term.
Txchick, we had the same problem when we wanted our first car loan. We had no debt and previous car had been paid cash, so we were in the same trap. No credit history, no credit (or very expensive credit)even though we were both gainfully employed. We ended up paying more than 50% of the car cash and financing the rest so that we could get in the bandwagon at a more reasonable rate. Having said that, it did help our credit a lot. Now we can borrow millions and buy a McMansion…:-)
There was a lender on one of these blogs a while back who admitted that if you have an 800+ credit score, good for you, but the lenders aren’t as fond of you as you think. They’re looking for the people they can rape.
I know, people who pay their debts are called deadbeats. What can I say, I’m a deadbeat and proud of it.
New York, like LA and Boston, seems to be correcting from the outside in. Got to reach Brooklyn and Manhattan sooner or later. If it doesn’t, wouldn’t it be ironic if (in a reveral of the 1960s and 1970s) low and moderate income households left for the suburbs as the better off move in?
The people who are comfortable with people from different cultural and racial backgrounds live here. There, white flight is a possibility, particularly in moderate income suburbs (as opposed to the places where the super-affluent live).
Just another factor over the next five years. Hopefully attitudes have shifted enough as one generation replaced another that it won’t happen. But you can’t rule it out.
“New York, like LA and Boston, seems to be correcting from the outside in. Got to reach Brooklyn and Manhattan sooner or later. If it doesn’t, wouldn’t it be ironic if (in a reveral of the 1960s and 1970s) low and moderate income households left for the suburbs as the better off move in?”
That’s already been happening in Manhattan for years, haven’t you been reading the papers. Record numbers of white toddlers with parents earning over $300,000 now living in Manhattan.
Never was so much money given to those with so little credibility (which is what “credit” is all about, make no mistake)
A refresher course:
http://www.google.com/search?hl=en&rls=GGGL,GGGL:2006-21,GGGL:en&defl=en&q=define:credibility&sa=X&oi=glossary_definition&ct=title
Credit quality is in full inversion, just like the yield curve.
Oh, you are just jealous. Debt-envy is what you suffer from.
Go buy some condos…you will feel better.
I’m taking two later today and will call you in the morning…..
Just make sure you get 110% LTV.
“‘You have the right to dispute a parking ticket but not to dispute the taking of your home,’ Galvin said yesterday….’”
“‘Maybe the borrower has valid reasons’ for failing to pay, said David Volman, an attorney in Shelton, Conn., who represents homeowners facing foreclosure…’”
“Volman added that it is unrealistic to expect homeowners who can’t afford mortgage payments to hire an attorney to try to stop foreclosure.”
I don’t even know where to start with how wrong all of this seems. That people who fail to do their due diligence - due diligence? Sh*t, just use some common sense - and make bad decisions should have an escape hatch based on their ignorance.
Due diligence wasn’t the issue these borrowers/loan agent intended to commit fraud . When the market was hot the whole idea was to get a cash cow .Real estate didn’t go up as planned and they are stuck . Don’t tell me this couple (the Quick’s) didn’t know that the original and the second loan package was fraudulent .This couple never made enough money to afford the house but they want to cry victim. You cannot tell me that that this couple was anything but gamblers and crooks who hooked up with some crooked loan agent . Isn’t it funny how somehow these low income people manage to somehow end up with the most crooked loan agents/realtors around ,( it is no accident) .No bail outs from tax funds !
Really, this is all just the media’s fault. If they would stop covering the story, I’m sure all the people that borrowed 300,000 on a 24,000 income would be able to make their payments and we could all live happily ever after.
It’s the media’s fault that politicians are falling all over themselves to offer bailouts. If the media did not announce all the foreclosures, then politicians would be collectively clueless.
The problem is the MSM is only covering the story of the 85 year old widow who’s being foreclosed on because she had severe health problems and had to refinance to cover her medical debts and got screwed by a predetory lender. I can feel sorry for her. It’s the other 95% of the FB’s I don’t feel sorry for. The Casey Serin’s of the world. The morons that borrowed $300K when they make $24K I don’t feel sorry for!
No, the 85 year old has medicare/medicaid. Her children or grandchildren wanted the equity (their inheritance) to invest in real estate and get rich quick.
Wrong. The pol’s banker buddies are calling everyday saying “help us” or we won’t be able to donate money to your next campaign.
Right on, just check Dodd’s list of campaign contributors.
I’m waiting for the next RE agent catch-phrase:
“Buy now before the Gov’t bailouts begin.”
yes, stop the ‘buy to cancel’.
And go for the ‘buy to be bailed out’…
All of a sudden I feel like I’m in some parallel universe of Contract Law.
People are clueless when signing contracts these days, signing away their lives as carelessly (i.e., not reading and understanding the contract) as if they were signing up for a Blockbuster card. Witness Casey Serin signing away all rights to his website for Real Estate mentoring (because they wined and dined him) and a story in the New York Daily News today that last month’s subway hero signed away 50% of any future earnings to some sleazy lawyer (one heck of an agent’s fee). These cases are borderline unconscionable, but I’m not so sure in the case of a zero down loan where the borrower has nothing to lose to begin with.
You know how people under 18 do not have the capacity to enter a contract? I think that’s where these lawyers are going: My client was too stupid to enter into this mortgage, i.e., his capacity to make a reasoned decision is akin to a minor’s. The more people that end up in this situtation, the more likely the courts will find this to be the case: that lenders are under some obligation to assume their clients are numbskulls. Scary, but I think that’s how it hashes out, ultimately. The fact is that these people are not stupid: they are negligent, even reckless. Hopefully the courts are smart enough to tell the difference between incapacity and irresponsibility.
What will be interesting is if/when we start seeing the grandma eating dog-food stories; because her MBS backed bonds tanked. All because the speculators skipped town on their upside down mortgages. Where will the sympathy be then?
Maybe lenders don’t have an obligation to the borrower, but the lenders ARE under the obligation to those for whom they are acting as agents (the investors, or depositors). They have a legal and moral DUTY to make sure that the loan can be paid back WITH INTEREST.
The borrower and the lender both have duties.
SubPrime fallout is reaching unexpected parts of the economy…even Harley Davidson may suffer as the HELOCs cave in…
http://blogs.marketwatch.com/greenberg/2007/03/hog_heavenor_he.html
Well duh. Didn’t we make that prediction last year (or was it the year before tha?t)?
I LIVE NEAR ALLENTOWN, PA. OUR PRICES WENT UP 100% IN 5 YEARS BECAUSE OF THE BUBBLE BUT MAINLY BECAUSE OF DUMB ASS COMMUTERS MOVING HERE FROM NJ & NYC. IT’S NICE TOO SEE THOSE LOSERS WHO DRIVE 5 HOURS EXTRA A DAY ARE NOW GOING TO LOSE THEIR ASS’S. STAY AWAY FROM THE LEHIGH VALLEY, WE HAVE NO REAL JOBS AND OUR PRICES ARE OUT OF CONTROL. OUR PRICES & INVENTORY OF HOMES ARE THROUGH THE ROOF. WAIT UNTIL SEPTEMBER WHEN ALL THE ARTICLES READ, “WE NEVER SAW IT COMING”. HOUSES AROUND HERE THAT PEOPLE WERE PAYING 250K FOR SHOULD BE BACK TO NORMAL, 125K.
My in-laws are from the Allentown/Easton/Bethlehem area. Always going on about how they live amongst all these New Yorkers, as if that’s some badge of honor. Fact is, as you say, the folks moving to Allentown from NY are losers; people that don’t know how to take care of their properties. NY white trash in hock to live in a big house 2 hours from where they wrok.
Only morons post in all caps.
“When property values were increasing more than 10 percent a year, as they have been in Chittenden County for the past six years, it provided a reserve fund homeowners could tap at will. ‘They could sell the house or they could borrow more to cure the default.”
It’s this convoluted thinking by the banking, mortgage and RE that has put us where we are today. “RESERVE FUND” my a$$. And the most unbelievable part is that these people gave no thought that there was a limiting value after which the game collapses and implodes.
As usual, elected officials showing their stupidity in all it’s glory. Secretary of State William Galvin suggests a judge will decide if a home should be put into foreclosure and that (Galvin) idiot makes a remark like, “After all you have the right to question a parking ticket….” MORON! Attempting to equate a $20 parking ticket with a $750,000 house where payments are 6 months in arrears!
The only legislation we need has nothing to do with property or parking tickets. We need legislation which would make it mandatory for ALL politicians and higher up elected officials be given a psychiatric evaluation before they are allowed to put their names up for election. Just think how many politicians wouldn’t get out of the starting gate? Hundreds…….No dictators like Hitler or Saddam Hussain or Idi Amin’s or Mussolini’s or Napoleon or politicians who simply suffer from (dangerous) delusions like Bush and Galvin.
HA!!!
Around here, you can question a $20 parking ticket after paying the fine as a “bond,” and paying an additional $25 in court fees.
If THAT is what he is talking about, I say Go For It!!
Paul
MY friend has dealership (car) in california. He was telling me he made almost 300K from jan. 06 to Aug. 06 but from sept. 06 to Dec. 06 he losted all. He is loosing 50-60K every month since last sept. He is in red this year. car salesmen are supprise what has happen but most understand is related to housing bust.
Domestic dealer?
This may very well be the nail in Detroit’s coffin. The Chinese will end up owning what’s left of Ford and GM (along with Chrysler).
I hit a few dealers last weekend looking for some “sweet deals”, as Casey would say, and I couldn’t believe how dead they were. Absolute ghost towns. Usually the sharks are chomping to get at ya, but I practically had to tape hundred dollar bills to my shirt to get help. These guys were totally despondent. I think I’ll hit ‘em again in a few months.
Last eve saw my first buyer incentive for automobile: Buy a Jeep, get $300.00 in gas money. On a marquee outside the dealership.
Dead in the water car sales can only mean one thing: HELOCs drying up. Somewhat OT - I’ve been wondering how soon all the soccer mommies in my suburbia-land will be letting go of their house cleaning service. No one around here cleans their own abode, it’s so low-rent, doncha know.
That kills me too. In my middle-class neighborhood, half the stay-at-home moms have housecleaners. Your kids are in school most of the day, you don’t have a job outside the house, and you can’t spend 1-2 hours a week cleaning your house? I can see it if you’re rich or if you have a 80 hour-a-week job but these are middle class income people who would be better served saving that money to, oh I don’t know, send their kids to college or something.
Oh, I should note, these are the same moms who drive their kids to the bus stop (less than 1/4 mile away) in their SUV’s and then drive home again.
Sure, then they get lipo’d when their thighs and butt get cheesy from being gas-as$es.
Because weirdo’s and pedophile’s are all over the place!! I just check the internet and nearly fainted at how many convicted pedophiles are home owners in my community.
Only slightly less creepy is how many realtors live in my neighborhood.
Hummer is also advertising a free sunroof when you buy. WTF?? Either make something that is more reasonable or cut the price to entice me.
I think the domestic car makers really screwed themselves by offering all those ridiculous financing deals a year or two ago. Cannibalizing future sales is never a good idea in the long run. Add in the drying up of HELOCs and they are looking at lean times ahead.
Our school district charges $400 per child, maximum of $950 per family for the privilege of taking the bus. The school parking lot is a congested hell. A lot of people (myself included) park nearby and walk when the sidewalks are clear of snow.
We went carshopping this last weekend, and every dealership was packed. Full.
That said, it was our first “summer” like weekend (it was in the 70’s, and beautiful out) so perhaps it was due to the first great weekend of weather.
FWIW: the dealerships were:
Audi
BMW
Lexus
Toyota
Honda
Hyundai
we had to wait for over 20 minutes to test drive the Lexus and also the Honda because all the testdrive cars were in use.
I never understood why anyone would want to use their home to finance a car. Now you will be paying for that car for the next 30 years, or more if you are a serial refinancer. The worst part is you can get a better financing deal to buy from a car manufacturer. My last car loan, 5 years 2.9%. I could’ve got a lower rate with a lower term.
The only relevant question is “how much a month”.
I was going to do that with the latest car I bought. Unfortunately, when it came to nuts & bolts, taking the 2.9% finance made me ineligible for one of the advertised rebates! And of course they didn’t mention that till I spotted it in the papers before we got round to wrapping up the deal. Argrhhh! So I took the rebate and paid cash.
I am sure the 2.9% financing was in lieu of a rebate. It’s an either or.
I recently found that most large dealerships offer pretty good rates because they deal with so many 3rd party lending institutions. Normally I provide the financing through my credit union and then take all the available rebates. Last one I bought, the dealership matched my credit unions rate through one of their 3rd party financing patners, so I just went with them for convenience.
Most of the one’s I know did it because the (HELOC) interest was deductible. All I ever hear is what they can deduct off their taxes, not whether it makes sense or not.
I’m sure that the representatives of the finance industry in Mass. are going to have a little “talk” with the legislature about Galvin’s proposal.
00’s mantra:
Be like Adlai (I see no sneaker endorsements out of this gig)
When in doubt, I refer to the words of wisdom from my muse, Del Tha Funkee Homosapien:
It’s the Repo Man! Reposession is my occupation
It’s not my fault you facin foreclosure, I told ya
I’m just an agent, workin for the man
and his manuscript say you owe him for this land
Don’t cry to me, and don’t lie to me
Actin like you ain’t home, fakin on the phone
You shoulda thought about that when you bought the Benzy
You missed a few increments
now we gotta come and get yo’ sh*t
If you slip on the payments
I get paid to make sure that you pay rent
or get out, throw all your clothes in the streets
Frozen meats, out your refridgerator
then my boys come back and get it later with the forklift
Heh, we don’t care how hard you worked, we takin yo’ sh*t
It’s too late, your payment’s way past your due date
You couldn’t hide from me, even with a new face
or plastic surgery, your debt’s outstandin
I don’t care about your family, don’t hand me
no excuses, you know it’s useless, no one’s stoppin me
Just get off the property before I bring the cops with me
Possibly, this could turn into a criminal act
Gimme your fax machine, PlayStation in the basement
adjacent, to the big screen television
You can’t tell the system no, we gotta get the dough
The company want they G’s, or the keys
to the convertible, and hey, nothin personal, okay?
I’m just doin my job (you know?)
Collectin on your debts, now you’re losin a wad
Bruisin your wallet, whatever in your pocketbook
all get took, to my agency, then they payin me
It ain’t phasin me, that’s my thing
When I mob off witcha sh*t, listen to me sing
I hate rap or wtf it’s called, but I’ll make an exception in this case.
FHA to the rescue! Looks like those in the scam mortgage maket for the last few years are going to get off the hook. The government, using upgraded numbers, are going to offer cheap mortgages via FHA loans. FHA had cut-off numbers so that borrowers in, say, California….couldn’t get a loan large enough to buy one of California’s over-priced property. The FHA numbers are very clear. The FHA was a good way to go if you wanted a mortgage but the funding limits were too low for many areas. Especially now. The new plan is to raise the limits so those in over-priced locations like California can borrow enough to (A) Become a new buyer (B) Refinance that over-priced property at a lower rate, thus reducing payments. Of course, those in “cheaper” areas will have no problems getting a mortgage. Also, first time buyers (immigrants) will go to the head of the line.
Once again, the USA is the most financially manipulated country in the world and this stuff is ALL pre-planned. Sadly, most Americans just don’t get it because they are too busy waving the flag. People are being manipulated into becoming property owners so that, eventually (many years down the road) they can pay for their own medical care/drugs via reverse mortgages. The American Dream of owning your own home is a FANTASY.
Many feel they get a pass by sticking a self adhesive bumper sticker on the rearside of their vehicles…
“Patriotism is the last refuge for a true scoundrel”
Samuel Johnson, Circa 1760
Is there any way to stop the FHA from changing the rules to escalate the War on Savers?
Dems Want To Help Borrowers By Boosting FHA Loan Program
BY JED GRAHAM
INVESTOR’S BUSINESS DAILY
Posted 3/19/2007
With subprime mortgage defaults and foreclosures on the rise, Congress is ready to get tough on “predatory” lenders.
But some industry experts warn that new laws to curb aggressive lending practices could worsen the subprime credit crunch and raise the risk of foreclosures. So where will borrowers with shaky credit turn? Possibly to the federal government.
At the same time that lawmakers are looking to restrain subprime lending, they also want to loosen restrictions at the Federal Housing Administration, which backs loans for borrowers with modest incomes.
“We need to expand the role of the FHA to issue more mortgages at better rates,” Sen. Hillary Clinton, D-NY, said last week.
The Bush administration also supports steps to revitalize the New Deal-era agency. It backed a bill last year that would have eliminated the minimum 3% down payment requirement for FHA loans. The bill easily passed the House, but stalled in the Senate.
http://www.investors.com/editorial/IBDArticles.asp?artsec=16&issue=20070319
The private sector has finished screwing the poor, now it’s time for the FHA to get some action.
Just what the poor need, more debt. Don’t mention affordable apartments they can afford to rent, pack them into houses with big debt. That way maybe they’ll vote the “right” way.
Outside of electing politicians who are not corrupt, owned by corporations and who spend their time pandering to voters there is little anyone can do. Unfortunately, politicians are like cancer. Once it’s deeply entrenched it’s hard to get rid of and, at the moment, we have a very corrupt group of politicians. On both sides.
It’s outrageous (but cynically amusing) listening to people like Dodd and Galvin, when this “mortgage-run-amok” scene has been going on for 6 years. Like I posted earlier, they act as if they have been on a Mission to Mars for the last 5 years, just landed back on earth, seen what’s happening in the mortgage and building industry and are, “Shocked! Shocked, to see how the American people have been scammed.”
Sickening but there’s nothing you can do.
Stucco, you need to get your money out of USD. You have often made remarks that suggested the Fed will protect the dollar. Looks like political considerations will ensure the US dollar gets ruined. Hope you are diversified in some way (metals, foreign currency, foreign bonds) …
“You have often made remarks that suggested the Fed will protect the dollar.”
Since BB took over as chairman, the Fed has often made remarks that suggested the Fed will protect the dollar. But actions speak louder than words, and inactions accompanied by contrary statements speak even louder.
foreign currency, foreign bonds
How does one go about doing this?
Everbank has foreign currency CDs (3, 6, 12 months) and more liquid deposit accounts.
http://www.everbank.com/
Merk hard currency fund is another possibility.
Open an account in Canada?
Everbank–a high-flying Florida lender based in Jacksonville?
Pass the barf bag.
I’d sooner short these jackasses than lend them my money.
Btw, hot tip–view from the ground says Millennium Bank is toast in 12 mo.s or less. Hell, so is M&S Bank, but make that 6 mo.s in their case. Too much money thrown at huge spec developments, post market peak, and now desperate for cash. Can’t wait for the “folksy” M&S Bank spokesman to move to G’ville to go on Section 8.
http://www.thenewspaper.com/news/16/1664.asp
Galvin should stop talking about parking tickets. A town in FL wants to foreclose on your house for a mere $5 ticket. Talk about abusive foreclosure.
Who, Waldo? LOL.
Of course, in Waldo’s case, they would be foreclosing on the trailer.
CNBC just had Senator Bennet from Utah on. He called it a housing bubble and basically said let the chips fall where they may. You can’t fix a bubble with more money. He compared it to the dot com scenario ! More and more people are doing that these days !
He said congress does 2 things in a time of crisis… nothing or over-reacts. He was not in favor of over reacting.
looks like business as usual on the planet queens. everywhere else the price is going down, but the proud realtors/sellers in queens still see fit to raise the price 10k monthly.
why, at this rate we’ll be millionaires in a year!
sucker mentality!
“I honestly cannot pinpoint when and where it all went so wrong in the USA.”
1971 When Nixon closed the gold window and 100% eliminated the gold standard. Money and Credit has expanded 10%/year since then.
“David Volman, an attorney in Shelton, Conn., who represents homeowners facing foreclosure . . . added that it is unrealistic to expect homeowners who can’t afford mortgage payments to hire an attorney to try to stop foreclosure.”
There’s another surreal statement reported without a hint of irony.
The gov’t will force lawyers to take the foreclosure cases pro bono.